Posted by John Beech on May 19, 2009
The news that Chester City have placed themselves voluntarily in Administration adds yet another chapter to almost two decades of turmoil (1).
Back in 1990 the club had to move temporarily to Macclesfield’s ground (resulting in a round trip of 75 miles for local supporters to attend a ‘home’ game) while awaiting the completion of the new Deva stadium, which was opened in 1992.
Success on the pitch eluded Chester and in 1995 they were relegated to Division 3, only to suffer further relegation, to the Conference, in 2000. In parallel their financial fortunes declined, with Chairman Mark Guterman taking them into Administration in October 1998 with debts of £700,000. The following July the club was bought by Terry Smith, an American businessman with a startling lack of football knowledge (2). Guterman duly reappeared at Wrexham where he became involved in a highly controversial saga regarding that club’s stadium.
The Smith era was characterised by tension between owner and manager. As suddenly as he had appeared, Smith moved on, with Stephen Vaughan taking over as Chairman in October 2001 (3). Vaughan has been dogged with various allegations over the years, all but one of which he has not been convicted for. These include money-laundering (while previously the owner of Barrow), and, more recently, car-associated fraud and theft (4). He was however convicted of a minor public order offence in June 2008 (5).
As at Barrow, Vaughan initially invested heavily in the club, which was promoted from the Conference in 2004. But in November 2008 Vaughan put Chester up for sale (6). The club was by then struggling financially, due in no small part to falling attendances, which had fallen to below 2,000.
One significant source of income, however, has been a five-year sponsorship deal for the naming rights of the stadium with, and shirt sponsorship by, Cestrian Trading, owned by Paul Baker. Baker is a wannabe owner but currently is struggling to sell the struggling (financially) Bournemouth.
The situation at Chester arises from a variety of causes, but it is increasingly typical in the sense that dependence on a benefactor to subsidise an unsustainable business model will only work if the benefactor has infinitely deep pockets which he is prepared to continue draining.
The situation becomes one of public entertainment surviving only through private subsidy, not how many would wish to see the English game, nor a situation which can last indefinitely. The benefactor model simply does not work in the long run.